Unicaja Banco earns 34 million up to March, 43% less due to the impact of the bank tax

Excluding the impact of the tax, it would have increased its profit by 62.9%

The Unicaja Banco Group obtained a net profit of 34 million euros in the first quarter of 2023, 43.2% less compared to the same period of 2022, due to the impact that the temporary tax on banks has had on its accounts.

In the first quarter, the entity has fully computed in its results the new temporary tax on banks, which has had an impact of 63.8 million euros. Excluding the tax, the profit would have amounted to 98 million euros, with an increase of 62.9% compared to the same period in 2022.

The bank explains that its result was supported by the increase in ordinary income, with an interannual growth of the interest margin of 24.8%, up to 293 million euros, and 1.3% for net commissions, up to 135 million euros. Also noteworthy is a 7.2% reduction in personnel expenses, and lower loan write-offs, with a 30.5% reduction.

Despite the fact that financial income from credit still does not include all the repricing of the Euribor, the customer margin increased 47 basis points in the quarter to 2.01%. The result of the exploitation activity grew 7.6% in interannual terms, up to 93 million, while the efficiency ratio improved by 8.5 percentage points in one year, reaching 48.6%, discounting the effect of the temporary tax on banks.

The balance of 'performing' (or non-doubtful) credit investment to individuals remained stable, with a balance of 34,169 million, increasing consumer financing by 3.8% year-on-year. The balance of the credit investment 'performing' stood at 51,606 million. In the first quarter of the year, 1,897 million new loans and credits were granted, of which 674 million were private mortgages (with a market share in formalizations that amounted to 7.5% of the national total).

For their part, private sector customer deposits remain stable. 75% are from individuals, the average deposit being less than 20,000 euros. Off-balance sheet and insurance funds increased 3.0% in the quarter, up to 20,851 million.

Likewise, the volume of non-performing assets (NPAs) continued its favorable downward path, with a year-on-year drop of 8.7%, due to the decrease in the 'stock' of foreclosed assets, of 14.4%, and of doubtful assets, 2.6%. This has been accompanied by maintaining high coverage levels, which "are among the highest in the sector." The coverage rate of non-performing assets reached 65.3%; Doubtful assets stood at 66.4%, while foreclosed assets stood at 64.2%. The non-performing loan rate remained stable, at 3.6%, and the cost of risk remained contained, 26 basis points, compared to 36 basis points in the same period of the previous year.

MANAGED RESOURCES GROW 1.4%

Managed funds increased 1.4% in the first quarter, reaching 99,585 million euros, with a "very stable and granular" customer deposit base. Time deposits increased 18.6% in the quarter and 21.4% in the last twelve months. Off-balance sheet funds increased 3% in the quarter, with growth in savings insurance of 8.2%, thanks to the marketing of a 'unit linked' aimed at customers with a conservative investment profile. The accumulated assets of investment funds stood at 11,370 million, after growing 1.1% in the quarter; and that of pension funds reached 3,712 million, with a quarterly increase of 0.8%.

For its part, in relation to financing activity, 'performing' credit to individuals (non-doubtful) remained stable (-0.3% year-on-year), registering a fall below the sector average (-0.8% year-on-year according to data from the Bank of Spain to February). Consumer financing grew 3.8% year-on-year. Productive credit investment (non-doubtful) stood at 51,606 million, falling by 3.6% year-on-year, taking into account that it has been affected by early repayments and a moderate demand for new credit.

The outstanding balance of the loan portfolio to companies fell by 4.8% in the quarter, with 15% of it covered by ICO guarantees. New loan formalizations reached 1,897 million, of which 674 million correspond to private mortgage financing, representing 35.5% of the total. The market share in new mortgage formalizations stands at 7.5% of the national total (according to data as of February 2023, accumulated over the last 12 months), well above Unicaja Banco's natural share in the Spanish banking sector .

Unicaja Banco's performing credit portfolio maintains a low risk profile and is highly diversified: 60.6% corresponds to mortgage financing, 23.4% to companies, 10.4% to public administrations and 5 7% for consumption and other purposes.

Unicaja Banco maintains its prudent risk management policy. At the end of the first quarter, the NPL ratio remained stable, at 3.6%, and the cost of risk, contained, at 26 b.p., compared to 36 b.p. of the same period of the previous year. The balance of doubtful loans decreased by 2.6% compared to March 2022. The reduction in the stock of gross foreclosed real estate assets was 14.4% year-on-year. Non-performing assets have continued their downward path, falling by 8.7% in year-on-year terms.

INTEREST INCOME INCREASES BY 24.8%

The interest margin increased in interannual terms by 24.8%, up to 293 million. The higher results obtained by the retail business have offset the impact of the higher cost of wholesale financing, mainly due to the change in TLTROs financing conditions. The commercial or customer margin increased 47 basis points in the quarter to stand at 2.01%, without the financial income from credit yet including all the repricing of the Euribor.

On the other hand, net income from commissions registered an interannual increase of 1.3%, reaching 135 million, mainly driven by activities in investment funds, securities and cards. The gross margin reached 373 million, 2.5% less than in the first quarter of 2022, as a result of the application of the new temporary tax on banks, recorded under the heading 'Other operating income and charges'.

The operating margin (before write-downs) stood at 160 million. Credit write-offs fell by 30.5%, placing the quarterly cost of risk at a contained level of 26 basis points.